Magazine

No. 21: LG Electronics


INDUSTRY

Consumer Electronics

SALES

$41.7 billion

PROFITS

$1.6 billion

KI HO PARK/

KISTONE

It's easy to find state-of-the-art mobile phones or flat-screen TVs made by South Korea's LG Electronics Inc. these days. LG is no longer a byword for ho-hum stuff. Yet for CEO Kim Ssang Su, the campaign for excellence is just beginning. ``We must be a top player,'' he says.

Since taking over in late 2003, Kim has set his sights high. LG's three main divisions -- mobile phones, digital displays, and appliances -- have been ordered to boost productivity by 30% through a ``TDR'' -- tear down and redesign -- program that involves about a third of the company's white-collar employees this year. ``Improving by 5% may be impossible. But improving by 30% is possible through new ideas and innovation,'' declares Kim.

By forcing his staff to run one of the most cost-conscious manufacturing operations in Korea, Kim has scored an early success. Sales grew 22%, to $41.7 billion, last year, and net profits more than doubled, to $1.6 billion. But after becoming the No. 4 mobile-phone maker, LG posted its first operating loss in handsets in the second quarter, thanks to competition and delays in rolling out new models. LG says phone profits are expected to rebound. To keep up the momentum, however, Kim has a lot more tearing down and redesigning to do.


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